Volkswagen executive offers to step down

July 9, 2005|By Mark Landler, the New York Times

FRANKFURT, Germany -- Volkswagen's mushrooming bribery and corruption scandal claimed its most prominent victim on Friday, as Peter Hartz, the company's head of personnel and one of Germany's most politically influential executives, submitted his resignation.

Volkswagen's supervisory board must decide whether to accept Hartz's resignation, but the company's chief executive, Bernd Pischetsrieder, made it clear that his departure would help Volkswagen move beyond a scandal that has raised disturbing questions about its corporate governance.

The pressure on Hartz to step down had been mounting since last week, when German prosecutors began investigating charges that two former Volkswagen executives siphoned an undisclosed amount of corporate funds into a web of fake companies. Both men had worked in his department.

While Hartz denies any wrongdoing, his close ties to the suspects -- as well as to allegations of other corrupt practices -- made his position untenable.